How to Determine Max CPC for New Keywords with No Conversion History

I am in the process of setting up a new adwords campaign. I understand that to determine max CPC you must use a formula that involves your profit per conversion, desired return on ad spend, and your conversion rate for that particular keyword or ad group. However, what if you have no history for that particular keyword or ad group. How will you know what to expect as a conversion rate?

I currently used 1% as my estimated conversion rate, and my ideal max CPC for my keywords was way below all 1st page bid recommendations. It's been about 16 hours since entering my bids, and I have no impressions. Any advice on what the best thing to do would be?

Its simply hit and trial, use kws which you think are business kws, think like a buyer, if you were to purchase the product ( whatever you are selling ) what comes to your mind instantly to type for it. Go ahead with this approach, see results for a week, then you will get better ideas and you will even get a conversion trend.

No impression and bid is below 1st page is an issue to be resolved, get your QS better, and then you have to be on the first page so bid accordingly, initially keep it a bit high, when clicks start then you can gradually reduce your bids.

Thanks for your reply. I just wanted to note that my account is not a new account, and it's been active for over 1 year now with around 4k in total spend. I am looking to get more active with it this year, which is why I am trying to build new and more focused campaigns with new keywords. I have always started my campaigns with bids close to googles 1st page estimates, but after doing more research, I am finding that it's possible to get clicks for much less regardless of what the 1st page estimate is.

I started my new campaign yesterday with all bids set to .25 per click based on a conservative conversion rate of 1%. I got no impressions within 15 hours. I then raised my bids to .50 per click (still not 1st page estimate for most keywords) and started to see impressions. Ideally, I want to pay .25 per click.

My question is: Do you think I should lower my bids back down to $0.25 per click and just wait it out? You did say it took almost a month once to start seeing action.

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